- Micron CEO says company can’t meet current demand
- DRAM production prioritized for AI and data centers
- Consumers reel from cheap RAM of yesteryear
Micron Technology Inc. CEO Sanjay Mehrotra has said the company “can only supply our key customers in the medium term with between 50% and two-thirds of their needs.”
Mehrotra’s statement reflects growing demand by data centers for components related to AI computing that will likely worsen memory supply.
The CEO added that to meet demand, the company will have to spend a lot on production.
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The RAM crisis won’t subside anytime soon
Mehrotra’s remarks come after Micron reported excellent second-quarter earnings, driven largely by data centers seeking components to meet growing AI demand with specific reference to high-bandwidth memory, namely dynamic random access memory (DRAM) and NAND memory.
But demand has vastly outstripped supply, and Mehrotra said that “we can only supply, to our key customers in the medium term, between 50% and two-thirds of their needs,” Mehrotra told CNBC’s “Squawk on the Street.”
Mehrotra also added that there is currently an “unprecedented gap between supply and demand” and that “we continue to expect supply and demand conditions for both DRAM and NAND to remain tight beyond calendar 2026.”
This has been the catalyst for the “RAM crisis” that consumers are experiencing, with manufacturers shifting production to meet the more profitable demands of AI, which has sent memory prices skyrocketing across the board. TrendForce predicted that the price of DRAM will likely double quarter over quarter in its 1Q2026 memory industry survey.
General storage to take a hit.
As DRAM and NAND production share similar production environments, resources allocated to NAND memory production are being cannibalized by DRAM production, especially since DRAM has a much higher profit margin.
This has had a further effect on investment in NAND production, as the remaining supply has been absorbed by enterprise demand for high-speed memory.
But the consequences do not end there. The lack of RAM supply is also forcing new devices, such as mobile phones and laptops, to ship with what is widely considered to be the minimum RAM, forcing software developers to address reduced memory supplies, resulting in an increase in virtual memory usage.
Virtual memory uses a portion of a device’s solid-state drive (SSD) storage as a substitute for RAM. Constantly writing and rewriting temporary data to the SSD can cause it to fail much faster than its warranty would suggest, adding additional cost to the consumer on top of increasing the price of the devices.
Will China seize the opportunity?
However, there is an opportunity for smaller companies, especially those from China, to fill the gap in the market. Several Chinese companies have accelerated construction timelines for new NAND and DRAM production facilities.
Yangtze Memory recently moved up the completion of its Wuhan Phase III NAND plant from 2027 to the second half of 2026, and ChangXin Memory is in the process of expanding its Shanghai DRAM facility to production of 300,000 wafers per month by the end of 2026.
The good news for consumers – especially now that the US has removed both companies from its restrictions list – is that the market could soon see an influx of cheaper, higher-capacity DRAM and NAND memory. The only caveat is that the products will not be from a recognizable brand, so time will only tell if the quality is maintained.
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